What a California commercial lease agreement is for
A commercial lease in California is a negotiated business contract, but the Civil Code sets several rules that the document has to follow. Every commercial lease must say whether the space has had a Certified Access Specialist inspection and, if not, contain a fixed paragraph about the tenant's right to one. Since January 1, 2025, small businesses, small restaurants and small nonprofits that give their landlord notice of their status get protections that cannot be waived: limits on what operating costs can be passed through, more notice before rent goes up on a month-to-month tenancy, and a translated lease if it was negotiated in certain languages. The remedies a landlord has when a tenant stops paying depend on specific wording, and some clauses that are standard elsewhere, such as a jury waiver, do not work in California at all.
This template is a full lease for office, retail, restaurant, flex and light industrial space. It has a basic terms table, the CASp statement with a cost allocation, a qualified commercial tenant section, net and gross options with defined operating expenses, a Proposition 13 clause and an audit right, then deposit, use, repairs, alterations, insurance, casualty, assignment, default, holdover and general terms. Two SB 1103 notices, a rent schedule with a fair market rent method, a work letter, building rules and a guaranty with the California waivers follow.
When to use it
Use it for a new lease, a renewal or a replacement of an outdated lease for commercial space anywhere in California, from a single-tenant storefront to a suite in a multi-tenant office building or business park. Landlords use it as their standard form; tenants use it to propose fair terms or to check what a landlord's form leaves out.
If the tenant is a small business, restaurant or nonprofit, settle its qualified commercial tenant status before anything is signed, because it changes how operating costs, rent increases and notices work. Ground leases, shopping centre leases with co-tenancy and percentage rent, cannabis tenants and residential property need different documents.
What's inside
The full list of sections and fields in this template, in the order they appear.
-
Basic terms and premises
- Property and suite
- Tenant's Share
- Term
- Base Rent
- Lease type
- Deposit
- Use
- Parking
- Guarantor
- Qualified tenant status
- Condition warranty
-
CASp disclosure
- Inspected or not
- Section 1938 statement
- Report delivery
- CASp cost allocation
-
Qualified commercial tenant (SB 1103)
- Status and notice
- Operating cost limits
- Rent increase notice
- Periodic termination notice
- Translation
-
Term
- Commencement
- Early access
- Delivery delay
- Option to extend
-
Rent and expenses
- Base Rent
- Operating Expenses and exclusions
- Proposition 13 reassessment
- Audit
- Late charge
-
Deposit, use and services
- Section 1950.7 deposit return
- Permitted use and permits
- Accessibility
- Hazardous materials and Proposition 65
- Energy data
- Utilities
-
Repairs, alterations and liens
- Landlord repairs
- Tenant repairs and HVAC
- Repair and deduct waiver
- Consent to alterations
- Notice of non-responsibility
-
Insurance, casualty and condemnation
- Tenant and landlord coverages
- Waiver of subrogation
- Indemnities
- Restoration and termination
- Statutory waivers
- Condemnation and goodwill
-
Transfers and default
- Assignment and subletting
- Profit sharing
- Default and 3-day notice
- Section 1951.2 damages
- Section 1951.4 lockbox remedy
- No self-help
- Landlord default
-
Holdover, surrender and general
- Holdover rent
- Surrender
- Access
- SNDA and estoppel
- Sale
- Attorneys' fees
- Judicial reference
- Force majeure
-
Schedules and exhibits
- Qualified tenant notice and attestation
- Operating cost documentation notice
- Premises plan
- Rent schedule and FMV method
- Work letter
- Rules
- Guaranty with California waivers
-
Lease Checklist
- 10 checks before signing
Preview pages
-
Page 1 -
Page 2 -
Page 3
How to complete the lease
- Fill in the basic terms. Use exact legal names, the suite and square footage, Tenant's Share, term, rent and lease type.
- Settle qualified tenant status. If the tenant qualifies, it signs Schedule 1 and the landlord delivers Schedule 2, both before signing.
- Complete the CASp section. State whether the space was inspected, deliver any report 48 hours before signing, and agree who pays for corrections.
- Choose the lease type. Triple net, modified gross with a base year, or full-service gross; keep the exclusions and audit right.
- Set the rent schedule. Fill in Exhibit B and any abatement, plus the extension option and fair market rent method.
- Decide repairs and HVAC. Confirm who maintains and who replaces the HVAC units.
- Choose the dispute forum. Judicial reference or the Superior Court.
- Complete the work letter and guaranty. As is, landlord's work, or a TI allowance; a limited or full guaranty.
- Run the checklist and sign. Give a translation first if one is required, then exchange signatures and insurance certificates.
Example: a small restaurant tenant
A fictional landlord, Mission Yard Partners LP, leases a 1,600-square-foot corner unit in a 12,800-square-foot retail building in Sacramento to Pho Lan Kitchen LLC, a restaurant with 8 employees, on a five-year triple net lease from February 1, 2026.
Qualified commercial tenant: yes. Pho Lan delivers Schedule 1 on January 12, 2026; Mission Yard delivers Schedule 2 the same day; the lease is signed January 20. Base Rent: $4,000 a month ($30 per square foot a year), rising 3% a year. Tenant's Share: 1,600 ÷ 12,800 = 12.5% of Operating Expenses, estimated at $0.85 per square foot a month, or $1,360. CASp: not inspected; the statutory paragraph is included; Pho Lan pays for an inspection and Mission Yard pays to correct the restroom path of travel in the common area. Owner's documentation: when Pho Lan asks on March 3, 2027 for support for a $2,140 parking lot resealing charge, Mission Yard must provide it by April 2, 2027.
California rules to know
- CASp statement (Civil Code section 1938). Required in every commercial lease; any CASp report must be given at least 48 hours before signing.
- Qualified commercial tenants (SB 1103, from January 1, 2025). Operating cost limits (section 1950.9), 30 or 90-day rent increase notice (section 827), 30 or 60-day termination notice (section 1946.1), translation (section 1632).
- Security deposits (section 1950.7). 30 days after possession is returned, or 2 weeks for rent-only deductions.
- Remedies (sections 1951.2 and 1951.4). Damages after termination, or the lockbox remedy when the lease allows reasonable transfers.
- Transfers (sections 1995.010 to 1995.340). Consent standards must be stated in the lease.
- 3-day notice (Code of Civil Procedure sections 1161 and 1161.1). A commercial notice may state estimated rent if the lease allows it.
- No pre-dispute jury waivers. Judicial reference is the accepted alternative.
- Mechanics liens (section 8444). A landlord's notice of non-responsibility must be posted and recorded within 10 days of learning of the work.
Lease terms that cause trouble in California
Many California commercial leases still in use were drafted before 2025 and have no qualified commercial tenant section, so landlords pass through costs or raise month-to-month rent in ways that now break the law. Others omit the CASp statement altogether, which leaves the tenant free to argue over who pays for access corrections after an Unruh Act claim. Out-of-state forms bring jury waivers that California courts will not enforce, and remedies clauses that never mention section 1951.4, so a landlord whose tenant walks away cannot simply keep collecting rent. This lease fixes each of those gaps.
Frequently asked questions
What is the CASp disclosure in a California commercial lease?
Civil Code section 1938 requires every commercial lease to state whether the property has been inspected by a Certified Access Specialist. If it has not, the lease must include a statutory paragraph explaining that the tenant may request a CASp inspection and that the parties must agree on who pays for it and for any repairs. This lease includes the paragraph and a cost-sharing clause.
What is a qualified commercial tenant under SB 1103?
From January 1, 2025, a microenterprise with 5 or fewer employees, a restaurant with fewer than 10 employees, or a nonprofit with fewer than 20 employees can give its landlord written notice and a self-attestation of that status. It then gets limits on operating cost charges, longer notice of rent increases and of the end of a month-to-month tenancy, and a translated lease if it was negotiated in certain languages.
How long does a California commercial landlord have to return a security deposit?
Within 30 days after the landlord gets the premises back, with an itemized accounting, or within 2 weeks if the only deductions are for unpaid rent (Civil Code section 1950.7). The landlord may keep only what is reasonably needed for unpaid rent, repairing damage the tenant caused, and cleaning.
Can a commercial tenant in California waive a jury trial?
Not in advance. California courts do not enforce pre-dispute jury waivers. Leases instead use judicial reference under Code of Civil Procedure section 638, where a privately chosen referee decides the case, which this lease offers as an option.
What is the lockbox remedy in a California lease?
Civil Code section 1951.4 lets a landlord keep the lease in force after a tenant abandons and collect rent as it falls due, instead of terminating and suing for damages. It only works if the lease says so and lets the tenant assign or sublet subject to reasonable limits, both of which this lease does.
